On 15 May 2023, the European Commission will publish the total number of allowances in circulation (TNAC) on the EU carbon market in 2022.
The TNAC indicator plays an important role in the functioning of the Market Stability Reserve (MSR) of the EU Emissions Trading System (ETS). It determines whether allowances are withdrawn to or released from the MSR.
Under Decision 2015/1814 (the MSR Decision), 24% of the TNAC is put in the MSR if it exceeds the threshold of 833 million. If the TNAC falls below the threshold of 400 million, a portion of allowances from the MSR is auctioned.
According to last year’s Communication, the TNAC amounted to 1 449 million allowances in 2021. As a result, nearly 348 million allowances have been withdrawn from auctions over the period 1 September 2022 – 31 August 2023 and placed in the MSR.
